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Thursday, August 15, 2013

American Airlines wants to strengthen its tie with JAL once again

According to an interview by Nikkei.com, American Airlines (AA) CEO Tom Horton wants to once again strengthen its partnership with Japan Airlines (JAL). Currently JAL and AA has a joint business agreement with AA to cover the transpacific routes but it is limited to passenger business only. AA wants to further that relationship and make Japan one of the pillars of its growth strategy.

AA is obviously eyeing the upcoming expansion at Tokyo Haneda (HND) airport in next spring when the slots for daytime international flights will double from the current 30,000 slots to 60,000 slots a year. Day-time HND flights are considered as a cash cow as it is much closer to central Tokyo than Narita (NRT) which the high yield business travelers tend to prefer to travel from. AA wants to make HND its new gateway between North America and Asia.

According to Horton, AA wants to increase flights from the US to Tokyo, as well as flights from Tokyo to other Asian cities. But he declined to name specific cities he had in mind for the expansion. Nikkei also points out that it is possible to expand the current joint business agreement to cover the cargo business as well.

But the problem is those slots have yet to be allocated. Horton said he wants these slots to be allocated fairly between JAL and ANA. When MLIT allocated the domestic slots, All Nippon Airways (ANA) got majority of them because ANA's CEO vigorously and continuously campaigned against an equal allocation between ANA and JAL. And allegedly it was also due to political reasons as well as JAL restructuring is pretty much the only success story of the Democratic Party of Japan. As a result, JAL was heavily penalized for not being awarded any points in the allocation scheme during the restructuring process although flights were operated as normal. ANA has now once again started the campaigning against JAL regarding the international slots.

To complicate the matter, Delta CEO wants a slice of the pie as well and moves its operation from NRT to HND. As he pointed out Northwest which is now owned by Delta operated at HND before both JAL and ANA. It is simply protectionism if only JAL and ANA are allowed to move its operation back to HND.

The slot allocation will be key to the future growth of both JAL and ANA. I would expect endless whining from ANA till this is settled. Hopefully MLIT will equally divide these slots between JAL and ANA which is probably better for the consumers. As for Delta, sorry you shouldn't get more slots than the rest of the foreign carriers just because you were here first. US carriers have been getting more slots at NRT than carriers from other countries. It's time to correct that with the HND allocation.

2 comments:

  1. But would that conflict with CX's codesharing agreement? AA placed quite alot of their number on CX's flights

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  2. Sorry I have no idea but probably shouldn't restrict AA from having codesharing agreement with other Asian carriers since JAL can't cover every single route.

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